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23 Cards in this Set

  • Front
  • Back
Scarcity
when there is not enough of a resource to meet all of everyone's wants
Microeconomics
studies the choices of individual units including house holds, business firms, and government agencies
Macroeconomics
studies large-scale economic phenomena, particularly inflation, unemployment, and economic growth
economics
social science that seeks to understand the choices people make in using scarce resources to meet their wants
factors of production
Basic inputs of labor, capital, and natural resources used in producing all goods and services
labor
contribution to production made by people working with their minds and muscles
capital
all mans of production that are created by people including tools, industrial equipment, and structures
natural resources
anything that can be used as a productive input in its natural state, such as farmland, building sites, forests, and mineral deposits
opportunity cost
the cost of a good or service measured in terms of the forgone opportunity to pursue the best possible alternative activity with the same time or resources
economic efficiency
a state of affairs in which it is impossible to make any change that satisfies one person's wants more fully without causing some other person's wants to be satisfied less fully.
efficiency in production
a situation in which it is not possible given available knowledge and productive resources, to produce more of one good without forgoing the opportunity to produce some of another good
investment
the act of increasing the economy' stock of capital that is its supply of means of production made by people
entrepreneurship
the process of looking for new possibilities making use of new ways of doing things, being alert to new opportunities, and overcoming old limits
comparative advantage
the ability to produce a good or service at a relatively lower opportunity cost than someone else
positive economics
concerned with facts and the relationships among them
normative economics
devoted to judgement about whether economic policies are good or bad
efficiency in distribution
a situation in which it is not possible by redistributing existing supplies of goods, to statisfy one person' wants more fully without causing some other person's wants to be satisfied less fully
hierarchy
a way of achieving coordination in which individuals actions are guided by instructions from a central authority
spontaneous order
a way of achieving coordination in which individuals adjust their actions in response to cues from their immediate environment
market
any arrangement people have for trading with one another
theory
a representation of the way in which facts are related to one another
model
a synonym for theory; in economics, often applied to theories that are stated in graphical or mathematical form
production possibilities frontier
a graph that shows possible combinations of goods that can be produced by an economy given available knowledge and factors of production